Between January and June 2009, the UK exported a massive £4.82bn worth of products overseas as the weak pound made international trade an ever-more appealing proposition.
So, there’s never been a better time for UK food and drink manufacturers to take their business abroad. It’s just a case of identifying the right markets and carefully developing the right strategy for your product to ensure your efforts aren’t wasted.
Previously, the UK has suffered because of its so-called ‘island mentality’. With one of the largest and most powerful retail markets in the world, it’s no surprise that opportunities to expand abroad were often overlooked in favour of an easier and more lucrative home industry.
But while our food retail industry has always been acclaimed for its innovation, British suppliers have been slow to exploit their skills elsewhere. Yes, some of the more innovative companies dabbled in international business, but the vast majority left exporting as a strategy completely untouched. This was a challenge, which once Food from Britain vigorously addressed, and which now is a key focus for the Green Seed Group and its international network.
And things do seem to be changing. Larger groups like Premier Foods and ABF are increasingly seeing the benefits that an integrated international strategy can deliver, while an increasing number of medium-sized companies are successfully picking off additional retail customers on the continent and further afield to broaden their customer base.
Those that make a long-term commitment to international business development, rather than merely see a short-term currency opportunity, will be the ones that reap the ultimate rewards.
This year, as ever, Europe was the most popular destination for UK food and drink products, with its share of exports from the country at 80.8%. This was fuelled particularly by growth in sales to the Netherlands, France, Italy and Spain.
France was one of the highest growth markets, up 17% to £618.7m, driven by the growth of meat products such as lamb, fresh beef, fish and seafood. Fresh beef was also popular in the Netherlands, as it’s now beginning to genuinely re-establish itself at the top end of the European market.
Outside of Europe, the US has offered a wealth of opportunity to the UK’s fish and seafood producers, as well as chocolate and soft drink companies.
Ex-pats living in Saudi Arabia have also helped drive strong growth in the biscuits, cakes and bread market, with this sector experiencing an increase in demand for its products to the region by 59.4%. While some sectors have witnessed slow growth internationally, one that has really rocketed is soft drinks.
The non-alcoholic drinks category saw the highest growth of any this year, with international sales rising by 22.2%. Ireland was the number one destination market for soft drinks, up 9.6% on the same period in 2008. France and Spain occupied second and third places, up 177.7% and 116.1% respectively, while the US was also a big growth market for UK beverage companies, with sales to the continent also up by 86.1%.
And one company that has really managed to grow its business through working with the Green Seed Group in the Netherlands is Daniels Chilled Foods. When Dutch department store Hema changed its food and beverage strategy to focus on more healthy and fresh concepts, Green Seed jumped at the chance to tap into its broad manufacturers’ network and introduce the retailer to Daniels chilled juices.
To meet the retailer’s demands, Green Seed was asked by Daniels to coordinate the development and launch of a new juices and smoothies range, in line with Dutch consumer preferences and Hema’s new strategy.
The company worked with Daniels to handle the pre-launch preparation, organisation of factory visits, labelling, logistics and marketing for the launch. A range of 10 SKUs were launched successfully at Hema, and Green Seed is working together with Daniels to further capitalise on Daniels’ supply potential within Hema.
But even as UK exports reach levels never seen before, the UK still operates a trade deficit in food and drink, and that fact is unlikely to change in the foreseeable future. True, much of the product we import we cannot produce here (or at least not as efficiently as elsewhere), but something we will (thankfully) never change is UK consumers’ demands for the best food and drink that money can buy.
The UK market continues to be highly attractive because of its size, centralised distribution and cosmopolitan and experimental consumer mix. It will take more than a weak national currency to keep international exporters to the UK away.
Simon Waring is MD of Green Seed UK, an international marketing development consultancy that assists food and drink companies with their export/import strategies overseas and within the UK.
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